Seven Comments on the Wage Report

1 The annual report on Wage Irregularities in the public sector has been published for 12 years now. Each year the Bank of Israel officials star in the listings, but they never reached salaries as high as reported this week for the year 2004.

What happened in 2004? Was it a particularly good year at the Bank of Israel? were bonuses handed out for beating inflation? Did the governor decide to give the guys a treat before he retired?

No, the only thing that happened was that a new management was instated, a new governor and new director-general. They claim that over the years, the Bank of Israel lied to the Finance Ministry's wages director about the real wage hikes at the central bank.

What, the central bank lying about its salaries? Yes, and don't expect anybody to do anything about it.

Rest assured that the Bank of Israel is not the only public body omitting to report perks and remunerations. Rest assured that what's going on under the table at a lot of public bodies is a lot juicier than what's above it. And between us, why not? Why should the bureaucrats sit aside jealously watching what's going on with the prime ministers, ministers and top managers, and not share the cake?

2 The treasury calls its report "wage irregularities" but 95 percent or more of the people in the report don't get one shekel beyond their due. Every agora in their pay complies with the public sector norm.

The reader might think that the word Irregularities means just that, but most of the paychecks simply represent the norm in the bodies in question.

3 Bloated salaries are just one of the problems in the wider public sector. The heart of the problem is the huge number of superfluous institutions and jobs, and the inability to fire useless people and recruit good ones.

4 Plenty of people in the public sector know which bodies are useless and where manpower could be cut. But as long as the Americans provide aid, and as long as the public is willing to pay tax and to accept the government's helplessness to aid the poor, there is no pressure to become more efficient.

5 The wage report does not discuss the non-contributory pensions that so many of the stars in the report receive. At some institutions, the real cost of non-contributory pensions is 30% above the salaries they report, and it can even reach 60% in the case of top-level officials. The treasury avoids publishing a report on the real actuarial situation, which would show a dizzying increase in non-contributory pension provisions for tens of thousands of workers.

6 A lot of the people in the report hold other jobs too, in the public or private sector. The treasury has no ability to control it. For many a gross salary of NIS 30,000 or NIS 60,000 a month is just a perk on top of their real job. For others, a position in government is a lever to get set up in the business sector.

7 If the government would force its senior clerks, ministers, regulators  and the rest of the pack controlling public resources to publish personal wealth statements on an open Internet site, during their stint in government and for three years afterwards, we'd see that grossing tens of thousands of shekels a month is nice; but a powerful position in government can be leveraged to gain vast wealth, seven digits, and that's in dollars.